Mr BOWEN (McMahon) (14:05): My question is to the Treasurer. I refer the Treasurer to his statement in the House that 'if you get on with the job of fixing the budget, you have a chance of fixing the economy'. Why then has the Treasurer's budget priority been to double the deficit by adding $68 billion in new spending and changed economic assumptions?

Mr HOCKEY (North Sydney—The Treasurer) (14:05): I just want to deal head-on with this great fiction. The Labor Party's record was $190 billion of deficits in five years. I know that the member for Lilley is hurting about that, because he promised there would be a surplus. In fact, they all promised there would be a surplus. There was no surplus. There is no surplus. In fact, the legacy of Labor is that over the next 10 years there is no surplus, there is no repayment of debt. So, as you can see, the Labor party legacy of debt and deficit was not just for the period they were in government; it is for as far as you can see in the years ahead—$667 billion. Labor's legacy out of all of that—which they are in denial about—is that they left an economic environment with deteriorating terms of trade, with rising unemployment, and with below trend growth. Labor's legacy was 200,000 more Australians unemployed between the time they went into government and the time they left government.

Labor's legacy in relation to economic reform was to impose more regulation on Australian businesses. In fact Labor introduced 22,000 new regulations in just five years—and there is no sense of embarrassment.

Mr Dreyfus interjecting—

The SPEAKER: The member for Isaacs is warned.

Mr HOCKEY: The problem for our opponents is that if they cannot be honest enough with themselves about what their legacy really was they will never be able to deal with the challenges of the future in an honest way. They do not get it. This is their legacy: $123 billion of deficits, $667 billion of debt, and an Australia that is not as competitive with the world as it should be. That is the Labor legacy, but they do not get it. Instead, they try to create a fictional legacy, and they repeat it and repeat it and repeat it, thinking that the Australian people are so stupid that eventually their fiction will become a truth.

The fact is Labor were terrible economic managers. Labor were hopeless at running the economy. Labor were hopeless at running the budget.